Abstract
The omission of pension wealth potentially distorts the international comparison of wealth distributions. Private pension wealth is often included in households’ wealth portfolios, while public pension claims are not. Augmented wealth, the sum of net worth and pension wealth, resolves this limitation by including the present value of social security pension wealth. This article provides a detailed analysis of augmented wealth in Australia between 2002 and 2018, capturing the establishment of the compulsory private pension scheme, Superannuation, which was introduced in 1992. Augmented wealth is slightly less equally distributed in Australia than in Germany or Switzerland but more equal than in the United States. The article also explores the relationship between Superannuation dissaving rates and the means-tested public pension scheme, Age Pension, and its distributional implications.
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Data Availability Statement
The dataset for the entire analysis is the Household, Income and Labour Dynamics in Australia Survey, which is available to every research institution worldwide after an application process.
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I thank Timm Bönke, Mattis Beckmannshagen, Bruce Headey, Katharina Jenderny, Johannes König, and Carsten Schröder for their helpful comments and remarks. I thank Roger Wilkins for his comments and remarks on the description of the Australian Pension System. I also thank the participants of the seminars at DIW Berlin, at Freie Universität Berlin, at Humboldt Universität zu Berlin, at the Melbourne Institute, and Umea University, participants of the conference International Pension Workshop 2022 by Netspar, the 34th Annual Conference of the European Society for Population Economics, and the Ninth Meeting of the Society for the Study of Economic Inequality.
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Longmuir, M. Fair crack of the whip? The distribution of augmented wealth in Australia from 2002 to 2018. J Econ Inequal 21, 835–866 (2023). https://doi.org/10.1007/s10888-023-09575-9
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DOI: https://doi.org/10.1007/s10888-023-09575-9
Keywords
- Augmented wealth
- Net worth
- Pension wealth
- Inequality
- Household income and labour dynamics in Australia survey